TERRE HAUTE —
The Terre Haute City Council wants more time to think about a major financial decision and a major traffic decision.
At their Thursday night regular meeting, the council decided to postpone votes on two important measures: The first would transfer $2 million from the city’s Economic Development Income Tax fund into the city’s critical general fund. The second would make downtown’s Cherry Street a two-way street.
The decision to table the EDIT transfer came as a setback to Mayor Duke Bennett, who had requested the move. It was one of three measures Bennett put forward seeking a total transfer of about $7.7 million into the general fund from three different sources: The EDIT fund, the “rainy day” fund and from the wastewater treatment utility in the form of a “payment in lieu of taxes” or PILOT.
The council passed the transfer of the “rainy day” and PILOT dollars, but had stronger reservations about transferring $2 million from the EDIT fund, which was designed to be used for economic development projects.
“You don’t eat your seed corn,” said Councilman John Mullican, D-6th. Economic development income taxes are “our seed corn,” he said. Mullican also said he worried the city was on a path to be in the same position next year. “I don’t see us doing things differently” in 2013, he said. “I think we need to make some changes in the way we’re doing business.”
Councilman Jim Chalos, D-at large, said the economic development income tax was sold to voters as a way to raise revenue for economic development – job-creating – projects. Therefore, he was reluctant to use it to pay the city’s ordinary bills, he said.
The vote to table the EDIT transfer was unanimous.
Had all three measures passed, the city would have ended 2012 with a positive balance in its general fund, Bennett said. It will now end the year with a $2-million shortfall in the general fund, something state auditors “red flag” in annual audit reports. Terre Haute ended 2011 with a $4.5-million shortfall in its general fund.
“It’s not horrible. It’s not the end of the world,” Bennett said of the council’s decision to table the EDIT transfer. “We came into this year with a deficit and we wanted to take care of that…I understand they have additional questions and we’ll just have to deal with that.”
Speaking after the meeting, which lasted about 20 minutes shy of three hours, Mullican said the decision to table the EDIT transfer reflected a mixture of concern over using EDIT money for daily bills and also a signal about the larger budget process.
“It was partly both,” Mullican said. “Consistently, we’ve been falling short and that’s how we got into this hole.”
Councilman Neil Garrison noted that the mayor said in a television interview in June that the city was in a position to pay all of its bills at the end of this year. “What changed?” Garrison asked.
Bennett answered that he planned at that time to use EDIT, rainy day and PILOT funds to bolster the general fund, adding, “We didn’t tell you [the council] about it until after that time.” Garrison said that highlights the need for better communication with the council and might show why the council is reluctant to pass the measures being requested.
• On the question of making Cherry Street a two-way street, the council also decided to delay a final decision until a later meeting.
Local officials, including Ron Hinsenkamp of the Metropolitan Planning Organization and Cliff Lambert of the Department of Redevelopment, expressed concern about the proposed move. Councilman Todd Nation, D-4th, and Diann McKee, an official with Indiana State University, expressed support.
Councilman Norm Loudermilk, D-3rd, said, given the city’s budget crunch, ISU should offer to pay for part of the cost of converting the street to two-way. “Until they are able to come to the table with an offer, we can’t look at this,” he said.
Reporter Arthur Foulkes can be reached at (812) 231-4232 or arthur.foulkes@tribstar.com.
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